2014 (11) TMI 712

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....,96,769/- along with interest thereon and also imposing equivalent amount of penalty under Section 78 apart from penalties under Sections 76 and 77 of the Finance Act, 1994. Aggrieved of the same the appellant is before us. 3. The learned counsel for the appellant submits that they are rendering both taxable as well as exempted services. However, they are taking credit of the input services and did not maintain separate records in respect of such services consumed for the dutiable output services and the exempted output services separately. However, they are following the procedure prescribed under Rule 6(3A) of the CENVAT Credit Rules, 2004 which provides for reversal of credit taken attributable to the exempted output services as per the....

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.... the principle enshrined in the said rule would also apply to the previous period also as Rule 6 (3A) provided for reversal of proportionate credit. He also relies on the decision of the hon'ble apex Court in the case of Chandrapur Magnet Wires (P) Ltd. vs. Collector of Central Excise 1996 (81) ELT 3 (SC); The Commissioner of Central Excise vs. Ashima Dyecot Ltd. - 2008-TIOL-659-HC-AHM-CX; Life Long Appliances Ltd. vs. Commissioner of Central Excise 2000 (123) ELT 1110 (Trib.) affirmed by the hon'ble apex Court reported in 2006 (196) ELT A 144 (SC); and Burns Standard Co. Ltd. vs. Commissioner of Central Excise - 2010-TIOL-1028-CESTAT-MAD. In all these decision it has been clearly held that reversal of credit tantamount to non-avail....

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....er of the output services shall pay an amount equivalent to CENVAT credit attributable to the input or input services used in or in relation to the manufacture of exempted goods or for provision of an exempted service, subject to the condition and procedure specified in sub-rule (3A). Sub-rule 3(A) gives the details of the procedure. As per the said sub-rule, credit reversal has to be done provisionally every month and thereafter at the end of the year, the reversal has to be finalised. The said rule also prescribes a formula as to how the credit attributable to the exempted services has to be determined. Once the reversal is done as prescribed in sub-rule (3A), it would amount to non-availment of credit. This position has been clearly conf....